Audit of the Abandoned Mine Land Reclamation Program, State of Indiana

We audited the State of Indiana’s use of Abandoned Mine Land Reclamation Program (AML program) grant funds to determine whether the State complied with Federal regulations and whether the Office of Surface Mining Reclamation and Enforcement (OSMRE) provided adequate oversight. States and tribes use AML program grants to restore abandoned mine land to productive premining land uses. 

 

We reviewed five grants totaling $77,879,429 that OSMRE awarded to Indiana’s Department of Natural Resources between February 2010 and December 2014. We found several issues with the State’s grant management and OSMRE’s oversight. Specifically, we questioned $723,361 across the five grants, representing unallowable grant charges and expenses not supported by proper documentation. We also found that the final financial report for one grant included misreported expenditures, contractor practices for weighing materials had insufficient oversight, and OSMRE’s risk assessment of Indiana’s Department of Natural Resources may have assigned a lower than warranted risk level.

 

Our findings show that OSMRE was not properly monitoring the AML program grants to the State of Indiana. We made eight recommendations focused on recovery of unsupported and unallowable charges incurred over 5 years, to resolve questioned costs and improve program oversight. Six recommendations have been resolved and referred to the Office of Policy, Management and Budget for implementation tracking, and two are considered resolved and implemented.